RESOLUTION FOR THE U.S. CONFERENCE OF MAYORS “AMERICA FAST FORWARD TRANSPORTATION BONDS”

WHEREAS, investments in transportation infrastructure generate more than $244 billion in total annual U.S. economic activity and confer significant benefits to cities, including: building the infrastructure necessary to support economic growth and goods movement and creating high quality jobs designing, building, operating, and maintaining the infrastructure; and

WHEREAS, the Highway Trust Fund has insufficient resources to maintain the current level of federal spending on surface transportation, much less help fund major new investment initiatives; and

WHEREAS, the fiscal and budget realities confronting both the Administration and Congress require a new  federal financing tools for transportation that entails smart, targeted, and innovative financing mechanisms that minimize impacts on the federal budget and maximize new job creation; and

WHEREAS, MAP-21 included an innovative finance title (America Fast Forward) to reform the Transportation Infrastructure Finance and Innovation Act (TIFIA) and increase its authorization to nearly $2 billion so that cities can leverage federal funds and attract substantial private and other non-federal co-investment; and

WHEREAS, local and state governments should be provided with additional incentives for innovative financing for infrastructure projects at a time when early construction of these projects can be done at the lowest possible cost and have the most profound and enduring impact on creating sustainable jobs; and

WHEREAS, Federal tax incentives can be a highly effective tool for encouraging private sector investment and, unlike direct federal spending, do not require growing the size of the federal government to administer them; and

WHEREAS, Congress has created over $35 billion of qualified tax credit bonds with bipartisan support for a variety of sectors including: school construction, renewable energy, as well as forestry and energy conservation; and

WHEREAS, America Fast Forward Transportation Bonds would support the creation of a 21st century national surface transportation system by creating a new category of qualified tax credit bonds to stimulate investment in highways, transit, bridges, freight, and intermodal facilities; and

WHEREAS, America Fast Forward Transportation Bonds would be a $45 billion program over 10 years where the federal government pay all or most of the annual “interest” due on the bonds in the form of an annual non-refundable tax credit against the investor’s federal tax liability; and

WHEREAS, the list of taxes that the credit could be offset against would be expanded to include federal withholding tax on wages and benefits retained by employers and pension plan administrators; and

WHEREAS, 35 percent of the volume would be allocated to all states based on their proportion of the nation’s population, and 65 percent would be allocated at the discretion of the Secretary of Transportation among projects; and

WHEREAS, America Fast Forward Transportation Bonds should enable a project sponsor to undertake substantially greater investments within a defined revenue stream for debt service payments than other borrowing approaches, such as traditional tax-exempt bonds; and

WHEREAS, America Fast Forward bonds would generate at least 500,000 private sector jobs nationwide,

NOW, THEREFORE, BE IT RESOVED, that The U.S. Conference of Mayors urges Congress to create a new category of qualified tax credit bonds for transportation to encourage infrastructure investment without relying on increased federal spending through grants, which would include:

• $45 billion program over 10 years; and

• Federal government pays all or most of the annual “interest” due on the bonds in the form of an annual non-refundable tax credit against the investor’s federal tax liability; and

• List of taxes that the credit could be offset against would be expanded to include federal withholding tax on wages and benefits retained by employers and pension plan administrators; and

• 35 percent of the volume would be allocated to all states based on their proportion of the nation’s population, and 65 percent would be allocated at the discretion of the Secretary of Transportation among projects; and

• Eligible projects would include: highways, bridges and tunnels; transit and intercity passenger bus or rail; and intermodal freight transfer facilities and private freight facilities conferring a public benefit.